A nice little earner: David Cameron rents out his Notting Hill home for up to £72k a year

David and Samantha Cameron are pocketing up to £6,000 a month by renting out their London home while they live in No 10.

In 10 Downing Street and the official country retreat of Chequers, the Prime Minister has the use of two grace-and favour properties.

But the couple have now decided to cash in on the luxury London property market by letting their £2.7million house in Notting Hill.

Family home: David and Samanta Cameron relaxing at heir £2.7million Notting Hill property in 2007, which they renovated heavily

The family also has the use of their £1million constituency home in the Cotswolds, which has benefited from years of taxpayer funding through the Westminster second homes allowance.

Mr Cameron sought to convince the public of his frugality when he became Prime Minister by announcing that he and his ministers would take a 5 per cent pay cut and a pay freeze for the next five years.

That means he is earning £142,500 a year, £7,500 a year less than his predecessor, Gordon Brown.

But the lucrative rental arrangement – which could earn them up to £72,000 a year – means that Mr Cameron will more than make up the shortfall as a result of his move to Downing Street.

At current market rates it would take him only five weeks to make up the difference.

It is thought that Mr Cameron is the first Prime Minister in recent memory to rent his London home on the open market. Tony Blair sold his, while Gordon Brown, John Major and Margaret Thatcher continued to use theirs.

After the general election Mr Cameron eventually persuaded his wife, who is expecting another child in September, to swap Notting Hill for Downing Street.

When one of the Camerons' neighbours once commented to Samantha that the removals trucks could soon be pulling up to take them to No 10, she is reported to have replied : 'I ****ing hope not.'

Security advisers had expressed alarm over the apparent stalemate,
pointing out that millions of pounds would have to be spent on
protecting Mr Cameron's London home if he, or his family, remained in
Notting Hill.

Portfolio: The PM has access to several properties, a perk of his important role

Earlier this week a new family moved into the four-bedroom Edwardian terraced house in West London that has been empty since the Camerons relocated to Downing Street.

The house was bustling with life as the new tenants, including a blonde woman in her 40s and two daughters, oversaw the arrival of their belongings in a removal van, and new mattresses delivered from John Lewis.

Speaking at the house the woman, who did not wish to give her name, said: 'I don't know the Camerons personally but we are very happy with the house and the move is going fine.

'I am renting it through an agent. Of course I know who lived here before but it doesn't bother me. It's no big deal. We have been so busy moving in.'

The disclosure that the Camerons have rented the property will only burnish the Prime Minister's self-described status as a member of the 'sharp-elbowed middle classes'.

The family, with their children Nancy, six, and Arthur, four, moved out of their Notting Hill home in May and have been staying at No 10 Downing Street on a temporary basis while they wait for the larger four-bedroom flat at No 11 to be refurbished.

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The family home holds precious memories of Ivan, the couple's eldest son, who died suddenly aged six in February last year.

After purchasing the house for £1.1million in 2005, the Camerons spent £600,000 transforming it in an eco-friendly makeover.

The entire rear extension was demolished and in its place a new kitchen and spacious basement were constructed, with a lift specifically to help cope with Ivan's cerebral palsy and epilepsy.

Estate agents in the highly sought-after area of London say similar, high-quality properties easily fetch between £4,000 and £6,000 a month in rental income.

They say the Cameron home is a perfect property – with the added cachet of belonging to the Prime Minister.

If the Camerons have used a rental agent they can expect to pay them around 15 per cent of each month's rent – £900 on a £6,000 monthly rental.

The monthly income will also be subject to income tax. But that £900, plus general maintenance costs and insurance, can be offset against Mr Cameron's tax liabilities.

Downing Street last night confirmed that Mr Cameron stopped claiming the second homes allowance for his Chipping Norton constituency home in March and would not make any other claims while he is Prime Minister. His final claim featured mortgage interest and a gas bill.

Plush: Prime Minister David Cameron is renting out his London home for £6000 a month